Robertson, who had just produced a Diamond studio album, pointed out his connection to a key part of the musical tradition that informed the Band's craft. Fellow performers like Band drummer Levon Helm and guest performer Neil Young remained openly derisive.

"When I heard that Neil Diamond was going to play, I asked, 'What the hell does Neil Diamond have to do with us?'" Helm said in his autobiography, This Wheel's on Fire. But Robertson made the link clear. "Neil is like Tin Pan Alley," Helm remembers Robertson arguing. "That '50s, Brill Building scene – songwriters like Doc Pomus."

Still, Robertson had to admit he faced an uphill battle with the argument. Diamond "was never the critic's darling," Robertson said in the liner notes to a 2002 reissue of The Last Waltz, "because he didn't fit in with what was deemed 'cool.'" Together, they fashioned one of Diamond's best albums in 1976's Beautiful Noise – and it followed a similar theme. The goal, Robertson said in Barney Hoskyns' Across the Great Divide, was to pay tribute to "that rock 'n' roll version of Tin Pan Alley I'd first encountered with [early Band mentor] Ronnie Hawkins when I was 15."

Recorded at the Band's Shangri-La studio in Malibu, and also featuring Robertson's bandmate Garth Hudson, Beautiful Noise became the fourth of six straight Top 5 Billboard hits for Diamond. "If You Know What I Mean" rose to No. 1 on the easy-listening charts, but the project's emotional high point remains "Dry Your Eyes." Composed by Diamond and Robertson about the period of healing after a series of shocking '60s-era assassinations, it became Diamond's lone contribution to The Last Waltz.

"I'm only gonna do one song," Diamond told the crowd, "but I'm gonna do it good." And he did. Rolling Stone later admitted that "truth be told, [Diamond] absolutely killed." "Dry Your Eyes" fit perfectly into the larger themes at play during performances by Young, Joni Mitchell, Bob Dylan and others at The Last Waltz – even if some thought Diamond himself didn't.

Young was said to have contemptuously introduced himself to Diamond. "Nice to meet you," he reportedly said. "I'm Neil Sedaka." Urban legend says Dylan went one step further after Diamond came offstage and boasted, "Top that!" Dylan supposedly shot back, "By doing what? Falling asleep?"

Diamond later straightened out the timeline and the context in this oft-repeated exchange. "Actually, it was before we both went on. He was tuning his guitar and I came over to him and I said, 'You know, Bob, those are really my people out there.' He kind of looked at me quizzically. I said it as a joke, but I think it spurred him a little bit and he gave a hell of a performance," Diamond told Rolling Stone in 2010. "It was a good night and an exciting night. I was glad to be a part of it."

Diamond never performed "Dry Your Eyes" again, though it lives on today as part of Martin Scorsese's celebrated concert film. Decades later, Robertson steadfastly stood by the choice, despite the controversy at the time.

"The Tin Pan Alley songwriters in New York crafted brilliant songs for people to record, but they weren't performers," Robertson said in the The Last Waltz liner notes. "Neil Diamond bridged that world. When I worked with him on his record, people said, 'Is this a put-on?' No, it wasn't. This guy is really good at what he does and comes from this tradition of songwriting. He wanted to be one of those people: [Jerry] Leiber and [Mike] Stoller, Carole King, Gerry Goffin. I thought what he does is as good as anybody who played The Last Waltz."